What Is a Founders’ Agreement?

An agreement between founders addressing matters such as roles, responsibilities, ownership, decision-making and other agreed arrangements.

What Does Founders’ Agreement Mean?

A founders’ agreement records how the founders intend to work together, including their roles, ownership, decision-making and what happens if the arrangement changes. It is a working document for the founding team.

Why It Matters

Founder relationships are the most important relationship in a young company. Documenting the arrangement early helps prevent misunderstandings when the business grows or circumstances change.

Related Information

Related legal terms: Shareholders’ Agreement, Vesting, Cap Table

Related practice area: Startup Legal Services →

Dealing With a Related Matter?

This explanation is a general starting point. If the term matters in a specific situation you are facing, a conversation about your facts can help you decide the right next step.

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This definition provides general information and does not constitute legal advice. Laws change, and their application depends on the facts of a matter. For advice on your specific situation, consult a qualified lawyer.